Explain how the judge could apply the coase theorem to


A farmer and a rancher in the wild west (there is no functional legal system) use adjacent land to raise corn and cattle. The cattle frequently trample and eat the farmer’s crop. The farmer insists that the rancher should be responsible for keeping his cattle away from the corn. The rancher argues that the farmer should responsible for keeping the corn free of the cattle. What does the Coase theorem have to say about this situation? What effect might an impending marriage between the farmer’s son and the rancher’s daughter have on your answer? Now suppose a territorial government is established with a marshal and a judge. Explain how the judge could apply the Coase theorem to assign liability rights between the parties. How might the invention of barbed wire (a relatively inexpensive method for making fences) affect your analysis?

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